Market Review
Polaris Trading Group: Taylor 3 Day Cycle Commentary Author: David D Dube (PTGDavid)
***Written 8 pm Tuesday evening for Wednesday’s trading
Tuesday’s Session was Cycle Day 1 (CD1): Cycle Day 3’s decline fulfilled the downside range objective setting up Cycle Day 1 Low (3636.25) which was successfully tested during overnight trade. The rally which began during the Globex Session took firm control above the 3660 handle which was yesterday’s Line-In-Sand (LIS). The upside objective of 3688 – 3690 zone which was highlighted in PTG Trading Room has been fulfilled. Range was 52.25 handles on 1.218M contracts exchanged.
…Transition from Cycle Day 1 to Cycle Day 2
This leads us into Cycle Day 2 (CD2): Core cycle objectives have been fulfilled. As such, with the price closing near the previous session high, momentum may take the price above 2-day high of 3690. Should this unfold, price is within striking distance of retesting all-time highs. Potential retracement within range would initially target 3675 handle. There are two estimated scenarios to consider for today’s trading.
1.) Price sustains a bid above 3690, initially targets 3700 – 3715 zone.
2.) Price sustains an offer below 3690, initially targets 3675 – 3660 zone.
For more detailed information for both bullish and bearish projected targets, please visit: PTG 3 Day Cycle and/or reference the Cycle Spreadsheet below:
Link to access full Cycle Spreadsheet >> Cycle Day 2 (CD2)
Thanks for reading,
PTGDavid
Polaris Trading Group
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MiM
A smallish MOC had the markets rise on the 15:50 candle which set up a reversal scalp on the 15:55 candle.
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Covid Corner:
More good news today, 5 more states dropped out of the rising category and two states joined the falling category. Clearly, there was no Thanksgiving surge, only a data drop during the period. As we finish the shopping season there is a worry that line waiting for checkout could resurge cases. The six-feet minimum distance guideline is easier to follow face to face, but the real issue for masked persons is following from behind and that is hard to judge. If you are following someone for a long time, ie in a checkout lane, voting (particularly inside), I would double that distance just to be safer.
Wear your masks!
Stay at least 10 feet behind someone wearing a mask! (Particularly in a checkout line)
Stay home!
Take your Vitamin D!
GMTT – Chart of The Day – Lumber – Dec 16, 2020
Lumber (JAN)
From a recent low in Lumber of $450 per thousand board feet, prices lately climbed above $800 per thousand board feet.
Pandemic has sent lumber prices soaring, causing home construction costs to rise amid strong demand.
Looking at our technical model Lumber is near a projected high.
While no indication for weakness yet, we do think that the upside from current levels is limited.
A close below 792 is a first indication that Lumber reached a high.
That would be a good entry level to short Lumber with a tight buy stop
In our three weekly GMTT research report we update this sector and many other sectors with our Thoughts and Trading Entry and Exit Signals.
For more info visit our website and subscribe for a free 14 day free trial!!
GLOBEX
| (ESH20:CME) GLOBEX Session | (ESH20:CME) Day Session |
| High 3685.00 | Opening Print: 3667.25 |
| Low: 3636.25 | High 3688.50 |
| Volume: 180,000 | Low: 3652.50 |
| ES Settlement 3685.00 | |
| Total Volume 1.45 M |
S&P 500 Futures: Turnaround Tuesday Brings In the Buyers
After trading in a 32.25 handle overnight range, the S&P 500 futures opened Tuesday’s cash session at 3667.25, up 24.00 handles, traded to a 3671.00 high in the opening minutes, and then sold down to the daily low of 3652.25 just after 10:00. From there, buyers would come in and push the equity indexes higher through the rest of the morning surging into the noon hour.
The afternoon would trade in a tighter, sidways range with the daily high printing at 3688.50 before settling the session at 3685.00, up 45.00 handles or +1.20%.
In terms of the overall price action, it was all about selling the early high annd then buying the 10:00 low holding into the early afternoon. In terms of the day’s overall trade, volume was 1.45 million.
Our View
Last Fed Meeting Of 2020 And ES 3700++
I have seen a lot of big rallies but not like the current one. Clearly it’s the gift that keeps giving. The markets continue to price in the second round of the Covid-19 stimulus that the government can’t seem to agree on but it just doesn’t seem to matter to the rally. The S&P has been going straight up since the beginning of November and the patterns remain the same, gap up, pull back and rally again. While yesterday’s volume was considerably lower than Monday’s, the overall tone was unchanged; bullish. I put out ES 3720 for this week and still think that’s achievable but I also think the big stock funds will start to adjust their positions for TSLA entrance into S&P over the next few days, especially on Friday.
Our view, there are new hopes this morning for the passing of the stimulus. Congressional leaders are optimistic but there is still no deal. McConnell and Schumer both say they are getting closer and continue to say ‘no one is going home for the holidays until the bill is passed’. One thing for sure is both sides are talking. Our lean, I’m still concerned about the lack of any pullback but that doesn’t seem to matter. You can sell the early rally or gap up and buy the pullback and get long or you can just be patient and buy the early drop.
Danny Riley is a 39-year veteran of the CME trading floor. He ran one of the largest S&P desks on the floor of the CME Group since 1985.
As always, please use protective buy and sell stops when trading futures and options.
Disclaimer: Trading Futures, Options on Futures, and retail off-exchange foreign currency transactions involves substantial risk of loss and is not suitable for all investors. You should carefully consider whether trading is suitable for you in light of your circumstances, knowledge, and financial resources. Decisions to purchase or sell as a result of the opinions expressed in the forum will be the full responsibility of the person(s) authorizing such transaction(s). BE ADVISED TO ALWAYS USE PROTECTIVE STOP LOSSES AND ALLOW FOR SLIPPAGE TO MANAGE YOUR TRADE(S) AS AN INVESTOR COULD LOSE ALL OR MORE THAN THEIR INITIAL INVESTMENT. PAST PERFORMANCE IS NOT INDICATIVE OF FUTURE RESULTS.
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